Investor-friendly laws to boost Philippine real estate

The CREATE MORE Act (CREATE to Maximize Opportunities for Reinvigorating the Economy Act) aims to benefit key economic sectors, including real estate and technology. This gives the real estate industry advantages by reducing corporate income tax rates, enhancing fiscal incentives, and streamlining the investment regulatory environment. These changes make property development and investment more appealing to both local and foreign investors.

The Philippines’ real estate industry can benefit from the CREATE MORE Act through the Strategic Investment Priority Plan (SIPP), particularly in the residential and office sectors. The SIPP offers incentives and simplifies entry procedures for foreign and local investors. Investments are subject to a four-to-seven-year Income Tax Holiday (ITH) for Domestic Market Enterprises (DME) and Registered Export Enterprises (REE). Furthermore, a special corporate income tax rate of 5% of gross income applies to REEs, alongside an enhanced deduction regime for both DMEs and REEs. These incentives last up to 17 years with Investment Promotion Agency approval, or 27 years with Fiscal Incentives Review Board approval.

The SIPP covers technology and innovation, including research and development, startups, and the IT-BPM sector (Information Technology and Business Process Management). Thanks to the CREATE MORE Act, the government is attracting investors, like IT-BPM companies, to establish or expand their operations through income tax benefits such as ITH and SCIT.

The SIPP also targets mass housing projects to address the housing shortage, providing incentives and a favourable business environment. As a result, investors gain access to benefits such as higher price ceilings for more profitable projects, government support, and tax incentives. Strong market demand ensures business sustainability and creates opportunities for new regional market expansion. This project enables the government to address housing backlogs, stimulate the economy, create jobs, and improve welfare.

Furthermore, the ongoing approval of the Foreign Lease Act, which aims to extend the lease term to 99 years from 75 years, could directly affect the real estate industry. The amendment of this law provides long-term tenure security for foreign investors looking to invest in sectors such as tourism and real estate development. It encourages greater foreign capital inflow, facilitates the establishment of long-term projects, and supports infrastructure and economic expansion.

In conclusion, the Philippine government’s reform of these laws signals a strong commitment to creating a more competitive, inclusive, and investment-friendly environment. It stimulates economic activity and contributes to long-term national development, bringing the country closer to achieving inclusive prosperity and improved quality of life for all Filipinos.